Factoring - Frequently Asked Questions

Factoring is a financial transaction in which a business sells its invoices (accounts
receivable) to a factor at a discount. A business will often factor their invoices to raise
capital in order to meet its present and future cash needs. A company that provides
factoring services is called a "factoring company".

Factoring can increase your cash flow so that you have more money available for operations
and expansion. You may make better credit decisions because a professional third party is
screening your customer's credit strength. Your administrative costs may be reduced because
the factoring company provides billing and collections services.